Democratic leaders talk budget -- finally

Doug Finke

Friday

May 25, 2007 at 12:01 AMMay 25, 2007 at 7:53 PM

Gov. Rod Blagojevich, Senate President Emil Jones and House Speaker Michael Madigan finally held their first face-to-face budget meeting of the spring session Thursday, exactly one week before lawmakers are scheduled to adjourn.

By DOUG FINKE

STATE CAPITOL BUREAU

SPRINGFIELD -- It’s a start.

Gov. Rod Blagojevich, Senate President Emil Jones and House Speaker Michael Madigan finally held their first face-to-face budget meeting of the spring session Thursday, exactly one week before lawmakers are scheduled to adjourn.

The meeting among the three Chicago Democrats apparently did little to resolve the gaping differences between what the governor wants and what legislators appear willing to approve.

Madigan, the only one of the three to speak after the hourlong meeting, said he shared with Blagojevich the results of a House Democrat tax survey he’d discussed with the media a day earlier.

The survey showed little interest by House Democrats in raising the income or sales tax — tax hikes Blagojevich has vowed to veto anyway — but that about 50 Democrats are willing to consider closing some so-called business tax loopholes as a way of raising revenue. Blagojevich read that as a positive sign, said Deputy Gov. Sheila Nix, who spoke on the governor’s behalf.

“Gov. Blagojevich was delighted to see and pointed out to Speaker Madigan that the number one source of revenue that the (Democrats) support is making business pay their fair share,” Nix said. “That’s really good news for us.”

However, the loopholes cited by Madigan raise only a fraction of the $8.6 billion in business taxes that Blagojevich called for in his budget speech in March.

During a closed-door meeting of House Democrats Thursday afternoon, Madigan distributed a list of 20 tax loopholes and asked members which they want to get rid of. If all 20 were eliminated, it would raise $500 million to $600 million.

“These were the same loopholes introduced (for elimination) three years ago, for the most part,” said Rep. Frank Mautino, D-Spring Valley. “It got 18 or 22 votes. Each one is going to have its own constituency. Friday, people will start hearing from lobbyists.”

But Rep. John Fritchey, D-Chicago, said this time around could be different.

“Many businesses that were adamantly opposed to loophole closures in years past may now see those closures as much more preferable to a gross-receipts tax,” Fritchey said.

The GRT Blagojevich has called for, which has generated virtually no support in the legislature, would tax all business transactions, not just profits, raising $7.6 billion to pay for increased education funding, universal health care and a construction program.

“Even if you close all of the loopholes, that still leaves us with a long way to go to have a workable budget,” Fritchey added.

Blagojevich, though, is not yet willing to scale back his spending request for the fiscal year that starts July 1, Nix said.

“No, we’re not. We’re actually really encouraged by being able this session to work on health care for everybody and education,” she said.

Jones left Thursday’s meeting without answering questions, while Madigan said their talk exposed “serious differences” between himself and Jones on gambling.

“I explained that in the House, it might be possible to pass a bill where you would work just with the incumbent casinos, and it would be for capital,” Madigan said. “Senator Jones’ position is that he wants expansion of gaming.”

Senate Democrats are working on a plan that would add three to four new casinos to the nine already in operation. One would be in Chicago, one in the south suburbs and another in Waukegan. A fourth could be near O’Hare International Airport.

Madigan, though, prefers only allowing existing casinos to expand. That idea, first floated by House Republican Leader Tom Cross of Oswego, would raise $450 million to $500 million a year and be used to finance a $5 billion construction bond program for roads, schools and mass transit.

“We’ve been pretty consistent in saying that we are for expanding the positions at the current facilities,” Cross said. “I don’t know that the will or the interest is there (among House Republicans) to expand much further than that.”

The plan envisioned by the Senate Democrats could raise $2 billion to $3 billion, enough to pay for a construction program and other state services.

Blagojevich spokeswoman Rebecca Rausch said the governor is “willing to consider gambling proposals in the context of what it pays for.” She declined to elaborate.

Doug Finke can be reached at (217) 788-1527 or doug.finke@sj-r.com.

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